Mashreq Bank posts Dh2.4b profit

The Dubai-based Mashreq Bank declared a net profit of Dh2.4 billion for the year 2015 and the bank's chief executive said it maintained steady performance in the difficult market conditions.

The Dubai-based bank said its operating income grew by 2.3 per cent to Dh6 billion driven by strong growth in net interest income compared to Dh5.8 billion in 2014. Net interest income at Dh3.3 billion was up by 7.3 per cent compared to 2014, driven by 9 per cent year-on-year increase in average loan volume. Mashreq's annual net profit for 2015 is almost the same the bank declared for 2014 at Dh2.401 billion. But its fourth quarter net profit declined by 13.7 per cent to Dh556.2 million compared to Dh644.3 million it earned during the same period last year.

There has been a slight decline in net interest margin from 3.20 per cent as of December 2014 to 3.10 per cent as of December 2015. On a quarterly basis, net interest income has moderately decreased by 1.6 per cent to Dh813 million in the fourth quarter of 2015 as compared to Dh826 million in the third quarter of 2015.

"As many others in the industry, we read the signs of the market softening early and took decisions to moderate our growth strategy accordingly. As a result, the year has delivered stable financial results for the year ending December 2015," Mashreq's chief executive officer Abdul Aziz Al Ghurair said in a statement.

"A net profit of Dh2.4 billion and earnings per share of Dh13.53 is remarkable when you consider how rapidly the market sentiments deteriorated in the last two quarters of the year, influenced by the tumbling price of oil that has had strong impact on all the GCC economies," Al Ghurair explained. The bank's operating expenses increased by 11.9 per cent year-on-year and by 7.7 per cent quarter-on-quarter to reach Dh2.5 billion. Mashreq's total assets increased by 8.8 per cent to reach Dh115.2 billion in 2015, compared to Dh105.8 billion at the end of 2014. Loans and Advances increased by 3 per cent in the quarter to end at Dh60.2 billion.

On a year-on-year basis, loans and advances grew by 3.7 per cent driven by 14 per cent growth in Islamic finance. Liquid Assets to total assets stood at 29.9 per cent with cash and due from banks at Dh34.4 billion as of December 2015. Customers' deposits increased by 7.5 per cent to Dh73.6 billion, driven by 61.9 per cent growth in Islamic deposits and 3.1 per cent growth in conventional deposits.